Appeals Court Rules Against Chevron in Ecuador
The Provincial Court of Justice of Sucumbios ratified a ruling that had ordered the U.S. oil company to pay $8.2 billion in environmental remediation costs, as well as an additional penalty equivalent to 10 percent of that total to cover plaintiff damages

QUITO – An appeals court in the northeastern Ecuadorian province of Sucumbios has upheld last year’s multi-billion-dollar judgment against U.S. oil supermajor Chevron Corp. in an Amazon pollution case dating back decades.

On Tuesday, the Provincial Court of Justice of Sucumbios ratified a Feb. 14, 2011, ruling that had ordered the San Ramon, California-based oil company to pay $8.2 billion in environmental remediation costs, as well as an additional penalty equivalent to 10 percent of that total to cover plaintiff damages.

It also upheld the lower court’s decision ordering the company to pay nearly $9 billion if it refuses to apologize to local communities for pollution caused by Texaco, which Chevron acquired in 2001.

A spokesperson for the Amazon Defense Front, which supports the class-action lawsuit, said this latest ruling confirms Texaco’s “culpability” for environmental damage between 1964 and 1990.

During much of that time, Texaco was the operator of a consortium that operated in Ecuador’s northeast and which also included state-owned oil company Petroecuador as majority owner.

The regional Ecuadorian courts have agreed with plaintiffs’ arguments that Texaco contaminated the ecosystem by dumping billions of gallons of toxic waste from oil-drilling operations and severely damaged the health of area residents during the two and a half decades it operated in Ecuador.

The Amazon Defense Front noted that Chevron still can take the case to a higher tribunal, the National Court of Justice, but it must deposit an amount equivalent to 1 percent of the awarded damages to do so.

Chevron, meanwhile, issued a statement Tuesday condemning the appellate court’s ruling as “illegitimate” and saying it is “another glaring example of the politicization and corruption of Ecuador’s judiciary that has plagued this fraudulent case from the start.”

After the February 2011 ruling in the lawsuit – first filed in the United States in 1993 on behalf of 30,000 Amazon Indians and peasants – Chevron accused the plaintiffs of “fabricating expert reports, manufacturing evidence, bribing and colluding with court officials, waging a campaign of intimidation against judges and even ghostwriting parts of the verdict itself.”

Chevron repeated those accusations in Tuesday’s press release.

For his part, Luis Yanza, executive coordinator of the Assembly of those Affected by Texaco, an umbrella group representing tens of thousands of peasants and Indians in that region, said in a statement that Tuesday’s ruling “confirms and ratifies that the company polluted the Amazon.”

“This is another step to (bringing) the guilty party (to justice) and fighting to ensure it remediates the damage. Of course no amount will be sufficient to make amends for the crime they committed in our region or bring the hundreds of dead back to life,” Yanza said.

Ecuadorian President Rafael Correa said he was pleased at the appellate court’s ruling because he believes prosecutors have proven their case against the oil company.

“I think justice has been served. The damage (Texaco) did in the Amazon is undeniable,” the leftist leader said, adding that the trial had pitted “David against Goliath.”

A court-designated expert had estimated the cost of cleaning up the area affected by the dumping of toxic waste and compensating the affected communities at $27 billion, but Chevron maintains the report was drawn up in conjunction with the plaintiffs and therefore corrupted.

Both Chevron and the plaintiffs had appealed the February 2011 ruling, with the latter seeking a bigger damages award.

Chevron – which succeeded in having the case moved from the United States to Ecuador in 2003, four years before Correa came to power amid voter anger at corruption and traditional politicians – noted that in the 1990s Texaco was released from any liability for damage by the Ecuadorian government of the time after carrying out clean-up operations.

Plaintiffs, however, say that Texaco’s agreement with the government did not release it from third-party claims and that Chevron is reneging on its pledge to abide by whatever decision was handed down by a court in the Amazonian town of Lago Agrio.

Chevron says now that the case has become politicized under Correa and that the company cannot receive a fair trial.

The company says on its Web site that Petroecuador should be the target of local communities’ legal action, noting that the state oil firm has been “the sole and exclusive owner and operator of greatly expanded operations in the area from 1992 to the present.”

Chevron has never operated in Ecuador and has no assets there that can be seized, but the plaintiffs could file suit in other countries in an attempt to collect damages.

Chevron in 2009 filed an international arbitration claim against the Ecuadorian government at the Permanent Court of Arbitration in The Hague, claiming violations of the country’s obligations under a bilateral U.S.-Ecuador investment treaty. EFE

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